Remove Risk-free Rate Remove Technology Remove Treasury
article thumbnail

Market Bipolarity: Exuberance versus Exhaustion!

Musings on Markets

The Markets in the Third Quarter Coming off a year of rising rates in 2022, interest rates have continued to command center stage in 2023. At the start of October, the ten-year and thirty-year rates were both approaching 15-year highs, with the 10-year treasury at 4.59% and the 30-year treasury rate at 4.73%.

article thumbnail

Use of Discounted Cash Flow Approaches in US GAAP Accounting

ThomsonReuters

Discounted cash flow approaches are also utilized within other functions of an organization, such as treasury, budgeting, financial planning and analysis, and tax planning. The Codification often provides guidance on how to select a discount rate for a particular area of accounting. Understanding the Calculation and the Output.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Trending Sources

article thumbnail

Inflation and Investing: False Alarm or Fair Warning?

Musings on Markets

Interest rates : To understand the link between expected inflation and interest rates, consider the Fisher equation, where a nominal riskfree interest rate (which is what treasury bond rates) can be broken down into expected inflation and expected real interest rate components.

article thumbnail

Data Update 5 for 2023: The Earnings Test

Musings on Markets

As I have argued in all four of my posts, so far, about 2022, it was year when we saw a return to normalcy on many fronts, as treasury rates reverted back to pre-2008 levels, and risk capital discovered that risk has a downside.

article thumbnail

Data Update 2 for 2022: US Stocks kept winning in 2021, but…

Musings on Markets

In a post at the start of 2021 , I argued that while stocks entered the year at elevated levels, especially on historic metrics (such as PE ratios), they were priced to deliver reasonable returns, relative to very low risk free rates (with the treasury bond rate at 0.93% at the start of 2021).

article thumbnail

Interest Rates, Earning Growth and Equity Value: Investment Implications

Musings on Markets

The first has been the steep rise in treasury rates in the last twelve weeks, as investors reassess expected economic growth over the rest of the year and worry about inflation. Coming in 2020, the ten-year T.Bond rate at 1.92% was already close to historic lows. In particular, the Fed's own assessments of real growth of 6.5%

Equity 52
article thumbnail

Data Update 1 for 2022: It is Moneyball Time!

Musings on Markets

Risk free Rates : While the US treasury bond rate is widely reported, I contrast its actual value with what I call an intrinsic measure of the rate, computed by adding the inflation rate to real growth each year at this link.